For a few happy seconds, it seems like nothing has really changed: then Wile E. Coyote looks down and sees that he has run over a cliff edge and is about to suffer a nasty fall.

That sequence, from the Road Runner cartoons, keeps appearing as we look into the Philanthrocapitalism crystal ball in search of predictions for social progress in the year to come. Discontinuity, much of it decidedly unpleasant, will be a dominant theme of 2017, along with its close associates uncertainty and unpredictability. Blame the election of Donald Trump and the broader rise globally of a populism that seems determined to turn on their heads many of the trends that have become established around the world in the past quarter century and more.

This sense of discombobulation will be stronger for those philanthrocapitalists who politically are of the liberal centre or to the left of it. Yet those who lean more rightwards may also find the going bumpier than they would like. America’s incoming President, for example, is not the disciplined ideological standard bearer that conservative foundations have been awaiting for half a century. He has strong opinions, full of sound and fury but often signifying nothing, and almost as often later reversed. He ran against the mainstream of his own party, which controls both houses of Congress and has an agenda of its own, much of it the result of those decades of effort by conservative philanthropists from Olin to the Kochs. How much of that agenda will coincide with Donald Trump’s? A lot will depend on how the President and his counterparts in Congress get along, and on whose terms.

All of which makes forecasting harder than ever. Yet we will not shrink from the challenge. Here are Philanthrocapitalism’s tips for the big trends in doing social good in 2017:

Philanthrocapitalism versus Misanthrocapitalism In terms of the net worth of its members, Donald Trump’s government will be the richest the world has ever seen. Yet will this governmental C-Suite of tycoons use their business acumen and even their personal resources to advance the public good, like Michael Bloomberg did as mayor of New York City? Or will they instead fill their pockets in classic kleptocratic, plutocratic fashion, or implement the sort of crazy, out of touch ideas that people insulated from the real world by too much wealth often embrace? Whilst the President Elect’s tweets and campaign rhetoric claim he wants to help the average American, there is little evidence in his past of much commitment to benefiting the average Joe, let alone the average Joanna. Even as he prepares to enter the White House, he has being looking to close his charitable foundation, which is being investigated by New York’s attorney general over alleged “improprieties”. His claims to have given away millions of dollars to good causes have encountered plenty of scepticism. And he has filled his cabinet with far too many dinosaurs of the business world, throwbacks from the 1980s era of “greed is good” Gordon Gekko-ism. Today’s leading businesses have largely embraced a more modern view of society that includes broader corporate responsibilities than merely maximising short-term profits – and the Trump cabinet members plucked from those companies (albeit hardly the most tree-hugging of firms, such as Exxon Mobil and Goldman Sachs) may find themselves at odds with those who still remember fondly the Predators’ Ball. Starting with its agenda for slashing taxes and regulation, but not carbon emissions, it is easy to imagine this being the most misanthrocapitalistic of governments. Yet perhaps the need to satisfy an angry public to win re-election will lead to an unexpected embrace of philanthrocapitalism. Many educational reform donors seem (at least) intrigued by the nomination of Betsy DeVos as education secretary, as it seems likely she will try to create new growth opportunities for the charter schools so popular with philanthrocapitalists. And in so far as the new administration wants to make government perform better, rather than just shrink it, pay for success (social impact) bonds have won bipartisan support in Congress, and perhaps could be expanded fast. As for investing in infrastructure, another Trump campaign pledge, whether that proves to be misanthrocapitalism or philanthrocapitalism will depend on what sort of infrastructure and what incentives govern how it is built and operated. Watch this space.

Business to the rescue? In recent years, business – especially large Western multinationals who care about their reputation with customers and/or potential employees – have become one of the more progressive forces in society, at least in terms of promoting inclusivity on gender, race and sexuality, and increasingly (outside of the carbon-based industries) on seeking solutions to climate change. If the Trump administration is determined to lead the world into a turn-back-the-clock Regressive Era, much will depend on whether today’s mainstream business executives step in to fill the Progressive leadership void. The worry is that, fearful of a public Presidential Twittering, they will instead conclude that discretion is the better part of valour and stay away from anything potentially controversial. The good news is that lately a few more enlightened business leaders have joined Paul Polman, the CEO of Unilever, in making a public stand for building a more inclusive and sustainable society. They include Marc Benioff of Salesforce (on issues ranging from homelessness to LGBT rights); Hamdi Ulukaya of Chobani (refugees); Emmanual Faber of Danone (which is experimenting with how to turn a large public company into a mission-driven B Corp) and Larry Fink of BlackRock, the world’s largest fund management company, who is leading efforts on long-termism and impact investing which may be especially significant. If the capital markets can become active supporters of company bosses who do stand up for social progress, then they are far more likely to do so. Making the profitable achievement of social progress, rather than maximising short term profits, a core part of mainstream investment behaviour is an urgent challenge for 2017.

The birth of the resistance movement Surprised and depressed by the success of Trump and fearful that he will tear down much of what they hold dear, many American philanthrocapitalists are likely to throw money at efforts to fight ignorant populism and combat the worst instincts of the new administration and a Republican Congress out of touch enough to try to undermine its own ethics watchdog on the first day of its new term. Ironically, much inspiration will be taken, and lessons learnt, from the successful efforts over the past 40 years of those conservative and libertarian philanthropies to undermine popular support for Progressive government. In Europe, the bigger foundations are likely to increase funding for efforts to fight back against the populist forces that are threatening to tear apart the European Union. On both sides of the Atlantic, expect to see the deployment of the sort of stealth capacity building strategies for making civil society stronger that in the past were reserved for China and countries under Soviet domination.

It’s the climate, stupid The top priority for the new resistance movement is likely to be stopping the Trump administration destroying what had been an increasingly concerted global effort to combat climate change. Here, enlightened business leaders and investors will have an especially important role to play. So will state and city governments, which can implement policies based on very different assumptions than those of the federal government about the threat of climate change. Finding ways to convince a sceptical public that climate change science is reliable will be essential. The American legal system may prove crucial in this, as efforts accelerate to prove that oil companies knew of the risks of climate change but deliberately set out to suppress the evidence and mislead the public. With ExxonMobil now being pursued in the courts by several state attorneys general, 2017 could be the year when Big Oil starts to experience the kind of massive fines and widespread stigma that was hitherto reserved for Big Tobacco.

Fighting fake news There will be a vigorous philanthrocapitalistic effort to fight the plague of “fake news” that has been credited in part for Trump’s win. Facebook and Google algorithms will be scrutinised and attacked for their ethical lapses. Foundations and other values-driven investors may threaten to divest from companies whose advertising dollars support fake news creators. One leader of this campaign will be one of the fake news movement’s most prominent targets: as well as launching the Barack and Michelle Obama Foundation, Trump’s predecessor in the White House is said to be mulling creating some sort of media-focused entity committed to restoring integrity to news.

Uncharitable deductions Now he is getting out of the charity business, and given what he will regard as an obvious bias of philanthropic organisations against him, what could be more tempting for the new President than to demonstrate his egalitarian tax-cutting credentials by getting Congress to abolish the tax deduction for charitable donations?

Charity begins at home As many hitherto internationally-minded donors refocus on strengthening the resistance to Trumpian destruction at home, giving to support social progress overseas will suffer. Cross-border giving has already been under fire from the sort of populist, anti-global governments that America’s incoming President seems to admire; but this will now be reinforced on the supply side. Bill and Melinda Gates will continue to stand out as an exception: indeed, they may double down on fighting health problems abroad with some high profile funding announcements and ambitious new goals, on everything from reducing child mortality to stopping pandemics and ending malaria. The appointment of former Gates Foundation executive and head of USAID, Raj Shah, as its new head encourages the hope that Rockefeller Foundation will continue to build on its historic commitment to doing good globally.

Arrested development Overall, a Trump administration seems likely to cut back on American foreign aid. It would be no surprise were USAID, America’s overseas development agency, reabsorbed into the State Department with a much reduced budget, or even scrapped entirely. There are potentially three exceptions to this trend: first, aid tied to explicit political goals may come in from the cold; second, if a case can be made that a particular aid program has a high return on investment, especially one that benefits America as much as the donor country, and better still in narrow economic rather than broader social ways, spending on that might be increased (pandemic prevention? investing in educating girls?); third, more weight may be given to the personal passions of those close to the President (veep Mike Pence is apparently fond of the Pepfar HIV/Aids program introduced by George W Bush, along with various other causes beloved of committed Christians; Ivanka Trump reportedly wants to see child care for working mothers expanded, and – though this does not seem to have influenced her father’s actions so far – worries about climate change). Meanwhile, there may be significant changes at the World Bank: Jim Kim’s reappointment has already been followed by further internal struggles, and he is likely to face pressure to quit from the Trump administration. Given that even President Obama was unwilling to allow a non-American to run the multilateral development bank, it is hard to imagine his successor doing so. If Paul Wolfowitz seemed a bad choice from a global development perspective, wait and see who Mr Trump picks.

Moon shadow, Moon shadow It was not just a female American president that the world missed out on last year; there had also been high hopes that a woman would be appointed as Secretary General of the United Nations. Instead, we have Antonio Guterres, a former prime minister of Portugal who most recently was UN High Commissioner for Refugees. With a default hostility likely from the Trump administration, he will have his work cut out, though perhaps he will be able to rally the world’s remaining progressive forces around him. Certainly, appointing as his deputy Amina Mohammed, the driving force behind the newly adopted Sustainable Development Goals, was an astute move. But making the UN even slightly relevant in the current climate may be a task beyond any mere human. How long before the recently-completed terms of Ban Ki-moon are viewed with an increasingly fond nostalgia for the Good Old Days?

‘Gina’s gonna be HUGE China, or as Donald Trump calls it, ‘Gina, is potentially the big winner globally from the pending disruption at the heart of American government. Expect to start to see it fill the leadership vacuum first by embracing freer trade but also by being in the vanguard of action against climate change and for providing foreign aid to poorer countries, especially in Africa. Much of what it does will be far from perfect, of course, but at a time when America turns inwards, China will seem one of the more committed drivers of global social progress.

Machine learning for good As the hype grows around the disruptive potential of Artificial Intelligence, the doom-mongers predicting robots taking all the jobs and complaining about the pernicious role of unethical algorithms in everything from news consumption to law enforcement will be joined by philanthrocapitalists who see the possibilities of using AI to do good. The phrase “machine learning” will become commonplace in grant applications to big foundations and Silicon Valley tycoons.

From UBI to Moonshots The most discussed topics among the big thinkers of philanthrocapitalism will be “universal basic income” (UBI) and “moon shots”. Paying everyone a “universal basic income” seems like a brilliant idea, especially if we face an increasingly jobless future, but how would you actually implement it? And announcing “moon shots” to solve all manner of big societal problems is deliciously ambitious, but how do you get the balance right between setting challenging but achievable goals and sloppy Utopian wishful thinking?

Comeback kids Last year, the Clinton Global Initiative was held for what was billed as the final time. After all, how could it continue once Hillary Clinton was elected President? As a result, a lively contest has kicked off to fill the vacuum for a private-sector-led philanthrocapitalist shindig in New York during UN General Assembly week in September. The hot favourite is a turbo-charged version of the existing Concordia Summit backed by philanthrocapitalist Nicholas Logothetis. But a dark horse candidate may emerge: a re-branded Clinton Global Initiative. After all, now they will not be returning to the White House, why shouldn’t Bill, Hillary and Chelsea put the band back together? Meanwhile, though he remains unpopular at home, Tony Blair still sees an opportunity for himself to lead the global fightback against nasty, nationalistic populism: watch out for efforts to launch a new “Blair Initiative” to revive the evidence-based political centre. And if you are looking for something seemingly even less plausible, how about a reconciliation between the leading couple of celanthropy? Yes, you read it here first: announcing Brangelina 2.0.

The Philanthro Crystal Ball worked pretty well last year. What is our oracle predicting for 2016 in the world of philanthrocapitalism?

CRSPR, ISIS, Data for Good & Refugees This year, we expect to see leading philanthrocapitalist thinkers wrestle with the implications for society of the powerful new gene editing technology, CRSPR; with what the private sector can do to beat terrorist threats such as those posed by ISIS; with how the increasing volumes of Big Data produced by private companies, especially the giant internet platforms and smart phone operators, can be used for public good; and whether private philanthropy can help the traditionally government-dominated system of helping refugees do a far better job (a theme that will be central to the big UN Humanitarian Summit in Istanbul in May).

Trumping Trump In a presidential election year, there will be more talk of plutocracy in America than since the days of JD Rockefeller. In some ways, this will be an opportunity for billionaires more generous in spirit (and cash) than The Donald to prove the sceptics wrong by putting their money behind the causes he opposes, from helping refugees and providing a path to citizenship out of illegal immigration to finding a more positive role for America in the world. It should be a chance, too, to debate how philanthropy and social entrepreneurship can better work with government (though we don’t have much hope that debate will happen). Instead, expect lots of talk about Big Philanthropy versus The People. However well-intentioned, philanthropy by the rich will be increasingly embroiled in a heated debate about inequality and the role of wealth in society. There will be lots of talk about the allegedly pernicious power wielded by Big Philanthropy over the democratic process. Foundations and other rich donors will need to work hard to demonstrate they are clearly delivering public benefit and working to empower The People, not undermine them. In short, the pros and cons of philanthrocapitalism will be an even hotter topic than this year.

CGI RIP? If Hillary takes the White House, there will be huge pressure to close the Clinton Global Initiative and maybe even the Clinton Foundation, or to radically change the governance of what has been called the Clinton Charity Empire, perhaps to something equivalent to a philanthropic blind trust. No one should want the CGI to disappear, as it plays a valuable role in the world of philanthrocapitalism by bringing together donors, big companies and social entrepreneurs. Nor should anyone want Bill Clinton to stop playing his catalytic role in this match-making process. Yet it would be unprecedented for the leader of the world’s superpower to have such close ties to a philanthrocapitalistic outfit of this nature, and those who care about its future need to devote serious effort right away to figuring out a credible path for it to continue under a President Hillary.

Will the Kochs Still Love Soros? This will be a testing year for the unlikely romance that has broken out between philanthropic bogeymen of the right and left over prison reform in America. The Koch brothers and George Soros, among others, have been making common cause over the absurdly high levels of incarceration in America, Soros out of concerns about the injustice of it all, the Kochs from a dislike of big government and a genuine libertarian contempt for needless restrictions on personal freedom. Will the demands of an election season, which will see their bogeyman status taken to new heights, cause their positive new relationship to fracture? Let’s hope not, as the emerging bipartisan consensus on the need for prison reform is one of the more encouraging developments in American politics.

Taking LGBT Equality Global In 2015, the rich countries of the West seemed to move decisively to embrace full equality between straight people and those who are lesbian, gay, bisexual, transgender, etc. Whilst there remains work to be done in every country, the world of philanthrocapitalism is likely to turn its attention increasingly to countries where, if anything, tolerance and inclusion of LGBT people is in decline, many of them in Africa, the Middle East & Asia. (The Economist is holding a big conference in March on the business and economic case for LGBT equality, for example, with one of its main focuses being what to do about the growing global rift on this.) The Ford Foundation recently announced that it will be scaling back its funding of LGBT organisations in America in order to give more support to similar efforts abroad, especially in Africa. Expect this trend to accelerate.

Africa Mostly Rising LGBT rights aside, Africa will be a source of plenty of good news on the philanthrocapitalistic front, with lively social entrepreneurs helping to build civil society, lots of bottom of the pyramid entrepreneurship around mobile phones and solar energy, and more African billionaires signing the Giving Pledge. One worry: Paul Kagame’s decision to seek a third term in charge of Rwanda will increase tension between those philanthrocapitalists who see the country as a model for African development and those who prioritise human rights and fear the rise of yet another illiberal African regime. Expect the recent controversy in India over Mark Zuckerberg’s efforts to bridge the digital divide via Internet.org to heat up in Africa, too, as local critics allege it is merely a scheme to advance the business interests of Facebook.

Impact Investing Goes Mainstream In 2016, three important philanthrocapitalist players will make major strides in growing impact investing. Mark Zuckerberg and Priscilla Chan will start to show why they opted to pledge to give away the bulk of their $44 billion future not via a traditional charitable foundation but through an Omidyar Network-like LLC that can do lots of impact investing. The Ford Foundation will dedicate perhaps as much as 10% of its endowment to impact. And the MacArthur Foundation will roll out a series of initiatives designed to help smaller investors collaborate to scale up impact investing. At the same time, expect mainstream financial organisations from BlackRock to Bain Capital to start implementing their promised commitments to grow impact investing. There will also be more social impact bonds (some successful enough to make up for the recent Rikers Island disappointment) and more IPOs of B Corps, to follow last year’s by Etsy. One slight worry: Paul Polman, who has become the face of a more sustainable, responsible approach to running a big business, is getting nearer to the end of his time at the helm of Unilever. If he goes this year, it is not clear that there is any existing CEO of substance ready to play that important role of leading the mainstream business world by example.

After Paris, Reality Bites In 2015, the world gathered in Paris to commit to beat climate change. In 2016, the delight at achieving agreement with far less rancour than expected will soon be replaced by the realization that the hard work remains to be done. Expect lots of discussion about how to mobilise private sector resources behind far greater innovation in renewable energy (see earlier discussion of impact investing), as well as renewed talk of the need to develop radical geoengineering strategies just in case what was agreed in Paris isn’t delivered or, even if it is, it fails to do the trick.

Bye-Bye Ban Ki, Hello Angela? There will be a new Secretary General appointed at the UN. Despite the efforts of Kevin Rudd and Helen Clark to get the UN to include the Antipodes within the essentially European bloc that is due to supply its next boss, we don’t think they have much of a chance. Philanthrocapitalists are likely to have three priorities: an open and meritocratic selection process; a candidate committed to deep partnerships with philanthropy, business and social entrepreneurs; and, in so far as it is compatible with the first two, a successful female candidate. Currently, two Bulgarians are the front runners to become the first ever female Secretary General, but if you fancy a flutter on a dark horse, you could do worse than back Angela Merkel, especially given the growing sense that her time in charge of Germany is fast running out.

The War On Foreign Donors In 2016, the war by autocratic governments on organisations receiving donations from abroad is likely to intensify, as governments from Russia to Ethiopia start to enforce more vigorously the laws they have put on the books in recent years. Two big questions may start to be answered: Is China really going to drive out long established foreign philanthropies such as Ford and Rockefeller at the very moment it is trying to encourage its emerging home grown philanthropists to emulate those American models of giving? And will foreign philanthropists maintain a united front against such laws, when it is largely human rights focused donors that are being targeted, whilst a blind eye is turned to development and health oriented donors?

Hacker Philanthropy and Effective Altruism In 2015, philanthrocapitalists in Silicon Valley got excited about two big, newish ideas: Hacker Philanthropy, proposed by billionaire entrepreneur Sean Parker; and Effective Altruism, championed by philosopher Peter Singer. The first refers to focusing philanthropy on finding solutions that work; the second refers to focusing philanthropy where it can have the greatest impact. Clearly, there is some overlap between the two ideas, both of which go to the heart of what philanthrocapitalism is about. But in 2016, there needs to be, and will be, much more debate about what each term means in practice, a debate that will be much easier to have if those who espouse these ideas have a year of significant activity putting large sums of money to work for the public good. Expect a growing conversation about what constitutes proof of impact, including when to use randomized controlled trials, and some uplifting studies of the benefits of giving in ways that most empower beneficiaries and of the considerable psychological and health benefits that result from being a giver.

The Age of Structural Philanthropy A big idea that will catch on in 2016 is Structural Philanthropy: how to give in ways that achieve a large scale impact in tackling the deepest structural problems afflicting society. Philanthrocapitalism will increasingly be focused on how to move the needle on inequality, racism, injustice, etc, in order to achieve genuine social progress. Well, here’s hoping, anyway.

This has been a bumper year for books related to philanthrocapitalism, including some terrific tomes on philanthropy and social entrepreneurship, as well as others focused on topics that should be of interest to anyone trying to innovate a better world.

Here, in no particular order, is a selection of the best of 2015:

Getting Beyond Better: How Social Entrepreneurship Works. Arguably the toughest of the many challenges facing social entrepreneurs is how to scale up their ideas so they have a meaningful impact on the state of the world. It is a challenge very few manage to meet. In this important book, Sally Osberg and Roger Martin examine what it takes to achieve significant scale, drawing on some telling examples of success (and failure). The two authors bring a wealth of experience and insight to this crucial topic, Martin being one of the world’s leading management theorists and advisor to firms such as Procter & Gamble, Osberg as the longtime president of the Skoll Foundation, a leading backer of the global social entrepreneurship movement. (Osberg also serves with Matthew and Michael on the board of the Social Progress Imperative.)

What gets philanthrocapitalists out of bed in the morning is the subject of a couple of fine books. Can’t Not Do: The Compelling Social Drive That Changes Our World by Paul Shoemaker, an early employee of Microsoft and founder of Social Venture Partners International, draws on his many years as a venture philanthropist. He examines what motivates changemakers to refuse to settle for the status quo in a way that is wise, passionate and practical. Jenny Santi, a leading philanthropy advisor, has interviewed philanthropists rich and not so rich to find out why they give. Her conclusion, engagingly described in The Giving Way to Happiness, is that it tends to make them happier. Both books are the perfect way to recover your idealism after playing too many games of Cards Against Humanity.

The Prize: Who’s in Charge of America’s Schools? is the story of Facebook founder Mark Zuckerberg’s high profile entry into philanthropy via a donation of $100m to improve the Newark schools district in New Jersey. Philanthrocapitalists will not enjoy reading Dale Russakoff’s book, which argues that the money was wasted and may have actually worsened the problems it was trying to solve. But they can learn a lot from it, as surely Zuckerberg and his wife are doing as they embark on giving away most of the remaining $44 billion of their fortune. Giving money away well is not easy.

Do the KIND Thing: Think Boundlessly, Work Purposefully, Live Passionately Daniel Lubetsky is a remarkable social entrepreneur. He founded a non-profit in Israel to bring Jews and Palestinians together to work for a viable two state solution to the Israel/Palestine crisis. As a business man he founded KIND, a snack business dedicated to simultaneously being wholesome and tasting good – which was a controversial idea in the food business when he started in 2004. The firm has been a big success, and his book is a great guide to how a social entrepreneur can disrupt an industry for the better.

From the Other Side of the World: Extraordinary Entrepreneurs, Unlikely Places One of the non-profits featured in Philanthrocapitalism is Endeavor, an organisation created to support the emergence of high impact entrepreneurs in developing countries. Elmira Bayrasli (a longtime friend of Philanthrocapitalism) used to work for Endeavor, and has written a terrific book that showcases high impact entrepreneurs from a wide range of emerging economies, from Pakistan to Mexico. One of the most inspiring stories she tells is of Shaffi Mather, a social entrepreneur whose despair at corrupt public services in Mumbai led him to build a for-profit ambulance business that provides free services to the poor by charging rich customers extra (a fairer trade model that might work well in today’s increasingly unequal developed countries). My review of the book is here.

Building the Impact Economy: Our Future, Yea or Nay Max Martin has written a short, thoughtful book that should be read by anyone genuinely interested in how capital with a purpose can be invested in ways that genuinely make a difference. Doesn’t have all the answers, but as you would expect of an author who has helped shape the emerging field of impact investing, asks the right questions. Two other terrific books explore how finance can redeem its miserable reputation by helping to improve the world. Andrew Palmer, a colleague of Matthew at The Economist, makes a compelling case for more financial innovation in Smart Money: How High-Stakes Financial Innovation is Reshaping Our World – For the Better. And Jeremy Balkin writes with the passion of a self-styled Anti-Wolf of Wall Street in Investment With Impact.

Two books that look at forces that shape our character and help some people lead effective, fulfilled lives whilst leaving others to fall by the wayside. Our Kids: The American Dream in Crisis is the latest important book by Robert Putnam, best known for his earlier hit, “Bowling Alone”, and does a depressingly thorough job of destroying the notion that there is real equality of opportunity in America today. In The Road to Character, David Brooks looks at what makes for good character, attacking the worship of material success and arguing that we would all be much happier if we lived our lives mindful of the sort of legacy we would like to have eulogised about at our funeral.

Inequality: What Can Be Done? Anthony Atkinson, the academic guru of inequality long before Thomas Piketty came along, has written a masterful analysis of the nature and causes of inequality. Even if his book does not quite live up to its title, failing to come up with compelling new solutions, it is a must read for anyone concerned about inequality.

Unfinished Business: Women Men Work Family. Anne-Marie Slaughter has delivered a compelling analysis of what remains to be done – and there is plenty – if we really are to have true gender equality in every corner of society. It is not just a matter of women needing to “lean in” more, Sheryl Sandberg-style; every one of us, male or female, has a part to play.

The Planet Remade: How Geoengineering Could Change the World What if the agreement just struck in Paris on measures to fight climate change does not deliver the goods – which, let’s face it, would not come as a huge surprise? As some notable philanthrocapitalists, such as Bill Gates, have started to realise, we may need to resort to a form of large scale human intervention known as “geoengineering”. Oliver Morton, a colleague of Matthew at The Economist, has written a fascinating book on what could be done if something drastic and fast working is needed to stop the planet getting more than 2 degrees warmer.

Further reading:

It is not a book, but this essay, Toward a New Gospel of Wealth, by Darren Walker, president of the Ford Foundation, contains much food for thought.

What role paying for buildings should play in philanthrocapitalism is the topic of this chapter, Philanthropic Leverage, written by Matthew for Laying Foundations for Change, a substantial volume of thoughtful tributes to the pioneering “anonymous donor” behind the Atlantic Philanthropies, Chuck Feeney.

The authors of Philanthrocapitalism are deeply involved in the Social Progress Index, a new, improved way of evaluating how a society is performing for its people. You can read all about it here, then watch Michael’s superb Ted talk explaining what needs to be done to achieve the new Global Goals agreed by the UN.

This is going to be a big year for philanthrocapitalism, not least because of the need to agree new goals for the world to replace the expiring Millennium Development Goals. It is there that we start our annual crystal ball gazing:

Battle of the Goals Expect a mighty struggle over what should be included in the so-called “Sustainable Development Goals” that will be adopted by the United Nations in September. In The Economist, Matthew predicted that some politicians will want lots of goals covering every possible need, whilst representatives of the business community and impact-focused philanthropy will argue for a narrower set of the most meaningful and achievable goals, around which the world’s doers can coalesce. Our guess? The SDGs will be broader than the MDGs, and more politically correct (decrying widening income inequality, for example), but a real, shorter shadow list of goals will be determined at a meeting of finance ministers in July in Addis Ababa, where money will be made available to achieve some, but not all, of the SDGs and the many more sub-targets associated with them. Philanthrocapitalists should focus their attention on that meeting in July.

Climate Heats Up There will be a deal on tackling climate change at the Paris inter-governmental meeting in December. But it will not be one that convinces many people it will do the trick. Expect green philanthrocapitalists to pursue more strategies that try to influence governments or bypass them altogether. In particular, efforts will intensify to convince institutional shareholders to either divest from carbon fuel businesses, or, arguably better, to use their ownership stakes to get firms to adopt business practices that do less harm to the planet. Despite the falling price of oil, some technological breakthroughs will encourage hopes that renewables can replace carbon fuels sooner rater than later.

Inequality and Jobs The rapid increase in the income and wealth of the super rich soared up the global agenda in 2014, thanks not least to Thomas Piketty’s best seller, “Capital in the 21st Century”. The debate over what to do about it will intensify this year. There will be more scary stories about technology destroying jobs, and calls for the sort of “inclusive capitalism” that delivers genuine social progress (as measured by the Social Progress Index). It will start to become clear if the efforts led by the OECD to crack down on tax dodging by big business and wealthy individuals have teeth. There will be growing pressure on the more enlightened members of the “1% of the 1%” who have embraced large scale philanthropy to demonstrate that their giving is not just putting lipstick on a pig, but really makes a significant difference.

Bitcoin and Drones For Good In 2015, crypto-currencies and remotely operated flying vehicles will be the height of fashion in Silicon Valley. This enthusiasm is likely to spill over into the philanthropy of the growing army of tech billionaires. Does Bitcoin offer a new way to cheaply transfer funds to needy people in far flung places? Can drones help provide storm damage insurance cheaply to subsistence farmers in Africa, or protect the peace in strife-torn countries? This year, we may start to find out.

African Philanthropy Rising Just as Mo Ibrahim did a decade ago, a new generation of home-grown African billionaires will start to scale up their philanthropy. They will include Tony Elumelu and Aliko Dangote of Nigeria and the East African 33-year-old billionaire Ashish Thakker, alongside signatories of the Giving Pledge such as Patrice Motsepe of South Africa. Whereas Mo Ibrahim’s cause has been better governance in Africa, these new African philanthropists may be more focused on promoting entrepreneurship across the continent, along the lines of the recently launched Tony Elumelu Foundation Entrepreneurship Programme.

Impact Investing Goes Retail and Political The idea that investment should now be evaluated along the three dimensions of risk, return and impact will increasingly become the conventional wisdom. There will be growing demand for “impact investments” explicitly designed to simultaneously deliver both a financial return and achieve a measurable social and/or environmental goal. In particular, there will be a crop of new retail impact investments from major fund management firms such as Fidelity and Prudential. Social impact bonds (known in America as pay for success bonds) will see rapid growth, not least by capturing the enthusiasm of politicians of all parties. Proposing a social impact bond will increasingly become a low-risk way for a campaigning politician to signal a commitment to innovation in government.

New Power Flexes Its Muscles The leading philanthrocapitalists will increasingly experiment with using “new power” techniques to drive change. This is so much more than viral video gimmicks such as last year’s hit, the ALS ice bucket challenge. Among the key themes are radical transparency, collaboration, providing platforms and tools, adopting a “movement mindset” and taking care not to become “the Man”. This Harvard Business Review article on “Understanding New Power” by Henry Timms (the driving force behind #givingtuesday) and Jeremy Heimans of Purpose (see Matthew’s article here) is a must read for philanthrocapitalists.

The March of the Millennials There will be the right sort of backlash by Millennials to some of the uber a-hole behaviour of some of their number in Silicon Valley. Millennials will increasingly take the lead in driving positive social change. That will include thoughtful young philanthropists such as Dustin Moscowitz and Cari Tuna or even Chelsea Clinton (who is starting to take charge at the Clinton Global Initiative, including by driving a serious impact measurement effort), B Corp entrepreneurs such as Neil Blumenthal of Warby Parker and social entrepreneurs such as Jane Chen of Embrace.

Ford Versus Rockefeller Until recently, the Rockefeller Foundation was deservedly seen as the best of the old foundations at embracing the ideas and methods of 21st Century philanthrocapitalism, under the leadership of Judith Rodin. But since Darren Walker took charge, the Ford Foundation seems to have got back its lost mojo. Already it is getting involved in efforts to make capitalism work better, including backing ethical supply chains and impact investing. There may be a lot more to come in 2015. Also, keep an eye on the Carnegie Corporation and the MacArthur Foundation to see if they put a philanthrocapitalist in charge.

Two Foundations To Watch The MasterCard Foundation and Legatum both seem poised for a break-out year. No specifics to mention at this stage. Just saying.

Eighty years ago today (4th January) the economist Simon Kuznets presented a report to the US Congress on a new measure of economic activity to help policy-makers to find a way out of the Great Depression. That measure, Gross Domestic Product (GDP), has today become the standard yardstick of how a country is doing. Today it is standard practice to compare nations in terms of which has the higher or lower GDP per capita (Qatar has the highest, Democratic Republic of the Congo the lowest, by the way). Our political leaders point to rising GDP (economic growth) to claim success for their policies.

GDP’s creator, Dr Kuznets, would be horrified. From the outset he warned that “the welfare of a nation can scarcely be inferred from a measurement of national income as defined by the GDP”. He went on to become a constant critic of how GDP was measured and used.

What we measure matters. It has a huge influence on how we use resources, which is why it is crucial our measures are aligned with our goals. As we wrote in ‘The Road From Ruin’, our follow up to Philanthrocapitalism, how financial institutions and countries were (mis)measuring their success – using profit and GDP, respectively – was one of the causes of the financial crisis of 2008. Better measurement is an urgent priority to build a global economic system that is socially and environmentally sustainable.

It was with this in mind that, in 2009, we floated the idea of a ‘Social Competitiveness Index’. That idea has won support from philanthropy (including the Avina, Skoll and Rockefeller foundations) and from business (Cisco, Compartamos and Deloitte) and, in April 2013, the first Social Progress Index was launched. (Michael is Executive Director of the Social Progress Imperative and Matthew is a member of the Advisory Board.)

GDP was not handed down on tablets of stone. It is a measurement tool that was designed to do a job eighty years ago. It still is a useful tool to measure economic activity. But we need new and better tools to help us frame and guide our choices about the world we want to live in. The Social Progress Index can be an important yardstick as we try to build a better world for all. To watch an animated history of GDP and be part of creating an index we can wholeheartedly celebrate when it turns eighty, click here.

The start of the New Year means that it is time, yet again, to gaze into our philanthrocrystal ball and make our annual predictions. Judge for yourself how well we did last year; not bad, we think. But we are hoping to do even better in 2014 with these forecasts:

Michael Bloomberg versus Bill Gates No longer mayor of New York, and no longer seriously considering a run for president, Michael Bloomberg is now free to challenge Bill Gates for the title of world’s best philanthropist. This is exactly the sort of titanic competition that philanthrocapitalism needs – friendly, as the two men often partner to do good works, but nonetheless real. Expect him to focus on ending smoking, gun control and, especially, making the world’s cities the leading places where big problems get solved.

New York versus London From charter schools to the High Line park, Mr Bloomberg partnered with philanthropy to help him improve New York. Bill de Blasio, his successor in City Hall, campaigned as the “anti-Bloomberg”, advocating traditional left-wing, big government solutions. All eyes will be on whether he actually intends to govern that way, and what that might mean for the well-being of New York. Meanwhile, now that Mr Bloomberg, a big fan of London, is footloose and fancy free, if Mayor Boris Johnson is really as canny as they say, he will ask him to give his metropolitan philanthropy a whirl there.

Impact investing’s big year Around the world, there are said to be 100 social impact bonds in the pipeline for 2014, which could make it a breakthrough year for impact investing. In September, the G8 taskforce on social impact investing led by Sir Ronald Cohen (of which Matthew is a member) is expected to propose some bold ideas to advance the field. Look out too for a joint initiative by some of the billionaire signatories of the Giving Pledge to use their money to build impact investing as an asset class.

Etsy versus Warby Parker Will the artisan marketplace or the affordably cool, humanitarian specs maker be the first hot B Corp IPO? Will investors warm to shares in firms with the legal right to put their social mission before profit maximisation? We think Etsy will prove the answer is yes.

Is the B Team an A team? 2014 is the make or break year for Sir Richard Branson’s effort to forge a group of business leaders into a team of activists dedicated to making capitalism truly sustainable. A new chief executive will have to devise a credible strategy and execute it. Will herding corporate top cats be any easier than herding the regular feline variety? Here’s an idea for them: ethical sourcing from transparent supply chains strikes us as an issue whose time has come, after the deadly collapse in 2013 of clothing factories in Rana Plaza, Bangladesh. The B Team should embrace this cause.

Unilever under fire? B Teamer Paul Polman has emerged as the leading example of a big company boss committed to putting his firm on a socially and environmentally sustainable growth path. But Unilever, the firm he runs, faces a tougher business climate in 2014, with slower growth likely in emerging markets and a reviving rival in Procter & Gamble. Will Mr Polman be able to resist pressure from shareholders to boost short-term profits at the expense of doing the right things for the long-term? All philanthrocapitalists should hope so.

Malala 2.0 After a remarkable year in which she almost – and should have – won the Nobel peace prize, Malala Yousafzai must figure out what to do next. It is tempting simply to urge her to shun the limelight and return to school to finish the studies so violently interrupted when she was shot by the Taliban. But with such an already iconic global brand, she is certain to be showered with opportunities to use it for good. Choosing the right ones will not be easy.

MDGs versus MDGs The world is in for a year of bipolarity as the 2015 Millennium Development Goals reach the home stretch. On the one hand, there will be much celebration of how much the MDGs achieved; on the other, much handwringing about how they fell short, and how the post-2015 goals should be far more ambitious. One thing’s for sure, unlike when the MDGs were devised in 2000, this time philanthrocapitalists from private business and foundations will have a seat at the goal-setting table alongside the politicians and multilateral bureaucrats.

Africapitalism’s big chance Nigerian tycoon Tony Elumelu coined the phrase “Africapitalism” to describe the need for Africa to tackle its poverty problems by finding its own ways to grow its economies. In 2014, a lot of money from home and abroad will be exploring whether these new opportunities for profitable and inclusive growth are really there. Fingers crossed.

Popular capitalism finds its voice We have long argued that for philanthrocapitalism to succeed the public must take more of an interest in how their savings are invested by the financial institutions to which they entrust their money. The #occupy movement popularised the notion that the word is being oppressed by an all-powerful 1%, but then ran out of steam. Expect more effective, targeted campaigning in 2014 such as by the carbon divestment movement on college campuses (Divest Harvard etc) and Britain’s Share Action.

Philanthropists to watch Will this be the year when Laurene Powell Jobs makes her big philanthropic move? Maybe. Failing that, look out for Facebook cofounder Dustin Moskovitz and his wife Cari Tuna as they get into their philanthrocapitalistic stride. Also, with Jeff Bezos having bought the Washington Post and Pierre Omidyar launching his own media business, will a third tech tycoon make a move to disrupt and save the news industry? Michael Bloomberg (yes, him again) is rumoured to want to buy the New York Times and/or the Financial Times. But we suspect it may be worth keeping an eye on the media ambitions of LinkedIn founder Reid Hoffman.

2013 was another strong year for books on themes central to philanthrocapitalism. These were our 10 favourites, in no particular order:

The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers by Paul Polak and Mal Warwick. If you believe that business rather than government aid offers the best route for the world’s poor to escape from poverty, this is the book for you. Full of practical advice for entrepreneurs looking to serve the billions of potential customers living at the bottom of the economic pyramid.

I Am Malala: The Girl Who Stood Up for Education and Was Shot by the Taliban, by Malala Yousafzai with Christina Lamb. In her own words, the horrifying and inspirational story of the young woman who really should have won the 2013 Nobel Peace Prize.

The Generosity Network: New Transformational Tools for Successful Fund-Raising. Private-equity philanthropist Jeff Walker and Harvard academic Jennifer McCrea have written a stimulating practical guide to how to inspire and leverage your network to achieve social good.

Just Business: Multinational Corporations and Human Rights, by John Ruggie. An important book on an important topic, by the man who has been guiding the UN’s business and human rights work. As Unilever boss Paul Polman describes it, the book is a “true master class in the art of making the impossible possible”.

40 Chances: Finding Hope in a Hungry World. Warren Buffett’s son, Howard, has turned a career in farming into a philanthropist’s passion for solving the global hunger crisis. He and his son Howard Jnr (plus a forward by Warren – three Buffetts for the price of one) have written a hard-hitting but positive book, spelling out the scale and causes of this deadly problem and what needs to be done to solve it. We particularly enjoyed this insider perspective on an issue increasingly getting the attention of donors, activists and big business.

Richer Lives: Why Rich People Give, by Beth Breeze and Theresa Lloyd. A fascinating study of 80 wealthy British donors and the people who work with them on their giving. Ideal reading for anyone planning to engage with a rich donor.

Mission in a Bottle: The Honest Guide to Doing Business Differently – And Succeeding, by Seth Goldman and Barry Nalebuff. The founders of Honest Tea tell their story and share their insights into how to build a mission-driven business. This is a business book with a difference: it takes the form of a comic book, illustrated throughout by Sungyoon Choi, which makes for an especially easy read as well as an inspiring one.

The Idealist: Jeffrey Sachs and the Quest to End Poverty, by Nina Munk. This controversial look at the work of one of the world’s most influential public intellectuals on tackling poverty should be read by everyone who cares about aid and development. Munk draws some conclusions that are extremely negative – unfairly so, fans of Sachs will contend. Read it, and decide for yourself.

From the Margins to the Mainstream: Assessment of the Impact Investment Sector and Opportunities to Engage Mainstream Investors. Admittedly, a drily-written report by the World Economic Forum rather than a book, but this is an essential read for anyone interested in how to turn the mainstream capital markets into an unequivocal force for good.

Lean In: Women, Work & the Will to Lead. Yes, it was overhyped and self-promotional, but Sheryl Sandberg, the COO of Facebook, has written a timely and much needed analysis of the economic status and potential of women that rightly challenges all of us to do more.

Revised edition of the year. In 2013, Connor O’Clery published an updated edition of The Billionaire Who Wasn’t: How Chuck Feeney Secretly Made and Gave Away a Fortune. The original book was brilliant; the revised edition includes the remarkable, often painful and utterly gripping story of the efforts by the “James Bond of Philanthropy” to wind down the Atlantic Philanthropies. Don’t miss it.

Caring is easy. Making a difference is hard. This perennial problem faced by anyone trying to make the world a better place is felt most acutely in the fight against extreme poverty. International aid is beset by accusations that a decent hunk of what we spend trying to feed the starving, give kids an education, or prevent unnecessary deaths from diseases unheard of in the rich world, disappears in corruption and bureaucracy. So can the hottest innovation in social policy of the past decade, the “Social Impact Bond” (SIB), be applied to development without falling foul of those old failings? The answer, according to a new report by the Center for Global Development (CGD), is an enthusiastic “yes”.

Development Impact Bonds (DIBs) would work just like their big SIB brothers and sisters (also known as ‘Pay for Success Bonds’ and ‘Social Benefit Bonds’) that are being rolled out in rich countries: some delivery agent (an NGO, for example) figures out how to make a measureable improvement in some social problem, someone (usually government, perhaps philanthropy) agrees to pay for that outcome if, and only if, it is achieved, and investors provide the financing that pays for the intervention, earning some profit on the deal if the intervention is successful, measured in terms of the desired social outcome. That’s the principle. What the CGD report does extremely well is draw together detailed case studies of how this might work in practice. From reducing sleeping sickness in Uganda, to providing basic education in Pakistan, to supporting entrepreneurs, the report explains how DIBs could be the solution.

‘Could’ is an important word here. These are theoretical case studies, not done deals, and the report spells out what needs to happen for the excitement about DIBs to become a reality. First, aid donors will likely have to be the buyers of these outcomes, which means that rich countries will need to raid other aid programmes to pay for DIBs. Not easy when most aid budgets are shrinking. Second, philanthropic foundations and wealthy donors will have a crucial role in paying for the design of the pilot DIBs and, probably, acting as pioneer investors in these new financial instruments. To make this happen more foundations will need to come into this space and, in particular, start thinking more creatively about how they use their endowments. Third, there needs to be a lot of collaboration, particularly in terms of sharing knowledge, between the different actors. Tricky for some governments and for foundations that too often don’t like to be inconvenienced by transparency.

These are big challenges, so it is reassuring that the report comes from a working group co-chaired by Elizabeth Littlefield, President and CEO of the US Overseas Private Investment Corporation, and made made up of representatives of government and philanthropy. Hopefully this is a group with the heft to make sure that its recommendations lead to action.

DIBs are an excellent example of philanthrocapitalism in practice: harnessing financial innovation for real social impact. Yet there are risks. It will take a lot of effort to get the early DIBs off the ground. There is a chance that some of these will fail (although the danger is that the creators of the DIBs will try to ‘prove they work’ but taking too little risk). Getting the balance of benefits right between the payer and the investors will be tricky (other public-private partnerships have a tendency to leave the government with little upside and a lot of downside risk). Fortunately, all of these are well analysed in the CGD report.

Where the report is weakest is in understanding the implications of the revolution that it is trying to start. The ‘FAQs’ section is keen to allay the fears of aid traditionalists that DIBs might mean ‘privatisation’ or impinge on ‘the capacity development of host country governments’. Indeed, the authors take great pains to claim that this revolutionary tool won’t threaten the status quo of aid conventional wisdom. Perhaps this under-selling is deliberate, to avoid a backlash.

But it is also likely to be wrong, if DIBs achieve the scale and impact to which the report aspires. Take the example of setting up schools in Pakistan. Official donors have been pouring money into the leaking bucket of the Pakistan government budget for decades, to little effect. If a DIB can provide the finance for private organisations (not-for-profit and for-profit) to get millions of kids into school, then we will see more aid money bypassing government and more public goods being delivered by private organisations. Judged in terms of impact, that seems like no bad thing to us.

New York is often described as the World’s Capital City, primarily because it is the headquarters of capitalism. Certainly this week, the last full week in September each year, as hundreds of leaders and thousands of their flunkeys gridlock Manhattan, it is easy to believe that this is the global capital – though what is bringing them to town is not capitalism so much as philanthrocapitalism.

Ten years ago, the annual September gridlock was due to a rather narrow, closed affair. Heads of state would deliver long, impotent speeches listened to by nobody at the United Nations General Assembly. Now, what happens in the UN HQ is a relatively small part of what we call Philanthrocapitalism Week. Since 2005, the annual meeting of the Clinton Global Initiative has been a magnet for businesses and non-profits, a philanthrocapitalistic marketplace with an emphasis on making explicit commitments to take action to tackle global problems. This year, as we predicted, the CGI has been revitalised by the addition of the females of the species, Hillary and Chelsea, to leading roles alongside the former president. Barack Obama will be there, as will the other famous face of “Billanthropy“, Bill Gates.

More recently, the global public has been given a voice in New York through the Social Good Summit, the brainchild of our old friend and new power guru, Henry Timms. The highlights of this year’s sold-out Social Good Summit, which is being live-streamed here, include talks by Malala Yousafzi, shot by the Taliban because she dared to go to school, actress Charlize Theron, Melinda Gates, World Bank president Jim Kim, Lauren Bush Lauren, Kumi Naidoo of Greenpeace, former vice president Al Gore, Richard Branson and Paul Polman, the sustainability-crusader boss of Unilever, plus moderating by Matthew (who will also be playing a similar role at the CGI).

And then there are a growing number of side events just in case the visiting leaders have left a few minutes of their day unfilled. Even before the week began, the UN Global Compact brought hundreds of corporate bosses to its Global Leaders Summit. Louise Blouin is hosting her always-stimulating Creative Leadership Summit. And if that isn’t enough, there is also Climate Week (fittingly, given the amount of hot air expected this week in Manhattan).

At the UN, the headlines are likely to be made by the continuing efforts to respond to the horrific events in Syria, as well as an expected post-Ahmadinejad charm offensive by Hassan Rouhani, the new president of Iran. But for most people involved in Philanthrocapitalism Week, top of the agenda will be figuring out what new global targets should be adopted to follow the UN’s Millennium Development Goals, which expire in 2015. We are looking forward to hearing lots of good ideas, most of which we predict will involve partnerships between governments, multilaterals like the UN, business, non-profits and civil society. As we have said before, this is the age of the posse, when global problems are tackled by ad hoc coalitions of the positive.

If this new approach is to work, for-profit companies and investors will have a big role to play. Hopefully, this week will see lots of practical discussion of how to make this happen. Two new reports suggest that this debate is at a critical juncture. The World Economic Forum has published an excellent study of how “impact investing” could play a huge role in funding a better world. On the other hand, a survey conducted every three years by Accenture of bosses of companies that have signed the Global Compact, found evidence of “sustainability fatigue” in corporate boardrooms.

We have no doubt that the leaders gathered this week in New York will talk the right talk. We will be watching closely for evidence that they are willing to take the hard steps necessary to walk the walk.

Partnership is all the rage nowadays in the world of development. Yet behind the consensual language of collaboration lies an uneasy relationship between state and private organisations, based on their very different attitudes and cultures. The worlds of business, philanthropic foundations and official donors have been evolving in parallel, and there is often misunderstanding of each other’s methods as well as a tendency to keep one another at arm’s length.

Less than a decade ago, philanthropy was seen as a sideshow in global development. When Michael left the Department for International Development (DFID) in early 2007 to write Philanthrocapitalism, most of his colleagues wondered why he was interested in such a marginal issue as giving or private sector solutions to society’s big problems. The Paris Declaration on Aid Effectiveness of 2005, for example, made no reference to philanthropy. Why should it? Pledges of extra aid money made at the G8 summit in Gleneagles that year meant signatories had little need to partner with the private sector.

Those hopes of plentiful official aid flows were dented by the financial crisis of 2008, however, prompting a search for new ways to finance development and complement official development assistance (ODA). When the Organisation for Economic Co-operation and Development development assistance committee (OECD DAC) met again in Busan, South Korea, in 2011, philanthropy had made its way into the communiqué. The G20 went a step further that year by asking Bill Gates, the most famous of all philanthrocapitalists, to write a report on how to finance the millennium development goals (MDGs).

It is only natural that philanthropists and business leaders have welcomed this belated recognition of their contribution to global development with lukewarm enthusiasm. The eagerness of official donors for the “new global partnership” has evidently been driven much less by an interest in the innovative ways that business and philanthropic organisations operate, and much more by the official development community’s need to find new forms of financing. The message to philanthrocapiitalists is unappealing: give your money through existing aid channels, desist from running your own programmes, and help drum up support for more taxpayers’ money for official donors to spend.

The resulting sense that official donors have nothing to learn from philanthrocapitalists is a fatal cultural flaw. Yet the fault does not lie with official donors alone. Too many businesses and private donors are unaware the MDGs even exist. Too few understand how the official aid system works, or that an aid ecosystem is in place that they should, at least, be aware of when they get involved on the ground.

Philanthropists have also, regrettably, lagged behind official donors in embracing the culture of transparency, data sharing and accountability to the intended beneficiaries of their largesse and to the governments of the countries where they operate. The Rockefeller and Bill and Melinda Gates foundations, which have built strong partnerships with official donors and engaged with governments in developing countries, are notable exceptions. The Gates foundation has been reporting its aid spending to the OECD DAC since 2011.

The Gates foundation’s considerable resources – both its money and its founder’s public profile – mean it can negotiate on equal terms with governments. Yet Gates’s acknowledgement that even his philanthropic behemoth is “a tiny, tiny organisation”, compared with the challenges it faces, reflects that foundations cannot do it alone.

So what should the new global partnership look like? First, there must be joint decision making and shared governance. Official donors cannot expect private philanthropic organisations to stump up cash without a seat at the table.

The Global Fund to Fight Aids, Tuberculosis and Malaria was an important innovation here: giving private donors and businesses seats on the board made it much more attractive to philanthrocapitalists than, say, giving a grant to the World Health Organisation over which they would have little influence. More of these unconventional funding mechanisms and issues-based partnerships will be needed.

Second, partnership works best around specific issues. Like it or not, success breeds success: if philanthropic organisations can see their money having concrete results and tangible impact, further donations are likelier.

As a successful partnership between official and private donors, the Malaria No More campaign is instructive. Some worry that focusing on success in this way distorts the global development agenda towards quick wins or more media-friendly issues. Maybe so. Yet suggesting that ODA is immune from faddishness, or the influence of what taxpayers might find “sexy”, is a bit of a stretch. Frankly, finding jobs for unemployed youth in Africa, or getting access to quality education, is likelier to attract funding than statistical capacity building. Moreover, in straitened times, heeding public opinion in donor countries and demonstrating success will be increasingly important.

Third, it is necessary to understand the division of labour. We are optimistic about the potential of the new global partnership because business and philanthropy can do things official donors cannot. A philanthropic dollar and an ODA dollar are very different. Rather than trying to fill the funding gap in existing official donor programmes, philanthropy should play the role of innovative risk capital in development, testing new ideas that can be scaled by official donors in collaboration with partner governments and local organisations. This is already happening to some degree, as with the partnership between USAid and the Skoll foundation on the Development Innovation Ventures programme.

“Nation states will remain the most powerful actors in world affairs”, wrote Samuel Huntington in the introduction to his landmark 1993 essay The Clash of Civilisations?. Though still true, the world has changed much in the past 20 years. The new global partnership must reflect the reality that governments are going to have to work more closely with philanthropic organisations and private actors to solve big global problems. We cannot walk the talk while running on parallel tracks, no matter how fast we go.

[A version of this article originally appeared on The Guardian’s Poverty Matters blog.]

Bylines

Matthew Bishop is the US Business Editor and New York Bureau Chief of The Economist. Mr. Bishop was previously the magazine's London-based Business Editor.

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Michael Green is an economist and writer, based in London. He is an adviser to the Big Society Network and a fellow of the Royal Society of Arts. Read more.

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